The Dudebox Subscription Market Research Project

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Introduction

Background

The Dudebox project is a seasonal subscription box for male clientele. Detailed market research revealed that most personal care products often target women. As such, men are often ignored despite their massive population and financial capacity (Li, Liu, & Gregoriou, 2021). The new company focuses on addressing this major market gap by offering men a wide range of products suitable for their varying needs under bouquets. The first is the Basic Package, which offers personal hygiene products. They include shaving and skincare products. The second bouquet is Premium Package, which has tobacco samples and tech gadgets, in addition to all the products offered under the Basic Package. The third bouquet is the Elite Package, offering car gear, outdoor and grill essentials, in addition to all the other products offered under the Premium Package. The sales and marketing unit of the firm has set the prices at $15, $20, and $25 per month or $117, $150, and $180 per year for the Basic, Premium, and Elite packages, respectively.

The management has already identified several companies that manufacture personal hygiene products for men. Although these companies produce quality products, they do not have a clear marketing plan that is suitable for men. Dudebox will sample these products from the top manufacturers and then package them into various bouquets and then deliver them to the customers. The decision not to manufacture these products was made after the market research revealed that existing firms are producing quality products but lac effective strategy to meet expectations of the target market. The company will be selling products from specific customers. The choice of the manufacturer will be based on the brand popularity, the quality of products they offer, and the price they charge for their products.

The product development unit of this company seeks to offer its customers more services beyond the products indicated above. The firm seeks to link its customers will retailers of a wide range of products. Dudebox will be providing critical information to customers about products that they need. They will be informed about the variety of quality and prices offered by different companies. The firm will inform them of the best option whenever they need to purchase other products. The additional service will come at no extra cost to the customers. As long as they pay their subscription, they will have access to reliable information about other products that they purchase regularly. The Dudebox will, therefore, significantly reduce the cost of products that they purchase. It will also help them to get the best quality products from reliable retailers around the country.

The company will be headquartered in Chicago, Illinois. The location was carefully selected because of the population of the targeted market and local laws and regulations, which are favorable to new companies. Operations of the firm will be limited to this state within the first year of operations. During this period, the management will be learning more about the market and products will be redefined to meet the expectations of customers in the best way possible. The plan is to ensure that in the second year of operation, the company will expand its geographic coverage to the entire United States. In the third year, the firm’s operations will be expanded to the greater North American region (The United States, Canada, and Mexico). The company will then spread its operations to Europe, Asia, and Africa. Table 1 below shows the different bouquets and specific products that will be offered in each:

Table 1: Dudebox’s Basic, Premium, and Elite Packages

Basic
(Get a 35% discount with a yearly plan)
Premium
(Get a 37.5% discount with a yearly plan)
Elite
(Get a 40% discount with a yearly plan)
  • Shaving products
  • Skincare for men
  • $15 per month
  • $120 per year (a 35% discount)
  • Flexible payment options
  • Cancel anytime
  • Shaving products
  • Skincare for men
  • Tech gadgets
  • Tobacco samples
  • $20 per month
  • $150 per year (a 37.5% discount)
  • Flexible payment options
  • Cancel anytime
  • Shaving products
  • Skincare for men
  • Tech gadgets
  • Tobacco samples
  • Car gear
  • Outdoor and grill goodies
  • $25per month
  • $180 per year (a 40% discount)
  • Flexible payment options
  • Cancel anytime

Interest of the Study

This study was important because of the financial implication of the project. Chapter 6 of this document provides a detailed explanation of the economic and financial plan for the project. It is evident from that chapter that this project will cost millions of dollars to execute. The financial implication of the project means that failure is not an option. As Li, Liu, and Gregoriou (2021) explain, a business project can only be successful if there is an effective plan of activities that have to be carried out. This study provided the opportunity to develop the plan. It defines the products that the company will offer, the targeted market, marketing strategy, and financial analysis. The growth strategy is also defined and challenges that the management has to be ready to address to achieve these goals.

The study goes beyond providing an academic paper. It provides a carefully defined plan of starting and running a business based on practical issues. A market gap was identified before the researcher finally decided to introduce the Dudebox. A study by Burcharth, Knudsen, and Søndergaard (2017) found out that men are increasingly becoming more sensitive to their physical image than ever before. Those with white-collar jobs such as lawyers, accountants, marketers, doctors, engineers, and business executives are sensitive about their physical outlook. As such, they are likely to subscribe to any of the three packages as long as they are guaranteed that their personal hygiene will be taken care of by this firm. This project offered an opportunity to define how to implement an idea that has a huge potential for success.

Aims and Objectives

The primary aim of this document is to develop an actionable business proposal and within the budget that has been made available. The following are the specific objectives that the researcher seeks to achieve:

  • To assess the local and international markets and define how they can be fully exploited;
  • To define the possible challenges that the product may encounter in the local and international markets, and explain how to overcome the challenges;
  • To develop an effective plan for the available resources needed to make the project a success;
  • To identify specific stakeholders in the project and the role they are expected to play.

Structure

This report has 8 chapters addressing specific issues about the project. Chapter 0 is the introduction, which explains the problem to be addressed. It provides background information and defines the aim and objectives of the study. The expected challenges for the development of the work and expected contributions of the project are also addressed in the chapter. Chapter 1 focuses on the world market trends. In this section, the researcher provides a description of the world market, providing identification of the market gap, and principal countries that will be targeted once the firm starts its operations. Also discussed in this chapter are the main companies around the world that will be competing against this firm, growth trends in different markets, market participation, innovations, new technologies, and new tendencies around the world. Chapter 2 focuses on the local market in the United States. It addresses how the local markets differ or are similar to the world markets, problems that the product offered seeks to solve, and defining the size of the market for the product. The chapter also provides a detailed analysis of the local market using the PESTEL framework.

Chapter 3 defines objective consumer and value proposition. It defines the characteristics of consumers who will be interested in the product. Chapter 4 discusses the company structure and processes. It also explains the legal status of the business, values, mission, and products that the firm offers. In chapter 5, a detailed marketing plan is provided. Issues about branding, positioning, pricing policy, distribution channels, and promotion are addressed. Chapter 6 defines the economic and financial plan. The analysis provides the breakeven point, the budget, and profit and loses analysis, return on investment, payback period, and how the project will be financed. The last chapter is the conclusion, which explains what will be achieved after the implementation of the project.

Expected Challenges for the Development of the Work

It is important to appreciate that there will be numerous challenges for the development of the planned project. One of the major challenges expected in this project is financial constraint. Successful implementation of this project requires a significant amount of resources. The major challenge is that as a new company, most of the financial institutions may not trust it enough to lend it money. Most of the planned activities require financial resources for them to be effectively implemented. The financial constraint may limit the growth rate of the firm, especially when the owner can no longer finance all the activities.

Competition is expected in the market, which is another challenge that the firm has to address. Although the business model for Dudebox is unique, it will still compete with individual companies selling their personal hygiene products directly to their customers. Firms such as Gillette, Dettol, and Big Boy are some of the brands that are currently selling their products to men (Voorveld et al., 2018). Dudebox will find a way of turning these major brands into business partners instead of competitors to achieve the intended success. For the firms that will reject the business model of this company, it will be necessary to find effective strategies for managing stiff competition.

Government policies, especially in foreign markets, will be another concern that the team will have to address. Some of these policies may limit the growth of the company. Regulations on the quality of products offered, impact on the environment, employment policies, and customer protection policies may sometimes be restrictive. In other countries, taxation may be oppressive. Burcharth, Knudsen, and Søndergaard (2017) explain that corruption is another major challenge in some Asian and African countries. The company has to bribe top government officials in some of these countries for them to be allowed to operate. The management must find ways of overcoming these challenges to achieve the expected success in the market. It will have to streamline its operations to reflect the environment in which it will be operating. Strategies that are successful in the home market may not necessarily work in foreign markets because of the differences in socio-economic and political environments.

Expected Contributions of the Project

This project will have a significant contribution to various stakeholders. The researcher classified the impact of this project based on stakeholders’ benefits. Shareholders of Dudebox will have direct financial benefit from the project if it achieves the intended success. The initial market research has indicated that there is a huge potential for the product not only in the United States but also in the global market. It means that the project will be profitable if there is an effective implementation of the plan. The owner of this business will have direct financial benefits. They will achieve financial freedom and will not rely on other firms for employment.

When this project achieves success, it is expected that it will create employment opportunities for a significant number of people both in the country and abroad. The nature of this business requires several people who will be undertaking various roles. As the firm grows, so will the number of employees. The government will also benefit directly from this project. Dudebox, just like any other product in the market, will be subject to taxation. Individuals who are working for the company will also be subject to pay-as-you-earn (PAYE) tax. There will also be the corporate tax that the company will have to pay. These financial contributions in form of tax will help the government to fund various projects.

The management of this company will need to put in place strategies for corporate social contribution. One such program will focus on environmental conservation. Just like other major corporate entities, this firm will be involved in the planting of trees, cleaning of cities, and fighting the emission of greenhouse gases as a way of protecting the environment. Corporate social responsibility will also involve assisting the less fortunate members of the society through direct financial donations and other similar programs (Voorveld et al., 2018). The creation of employment within various communities in the country is expected to reduce crime rates because of reduced cases of unemployment.

World Market Trends

The company will start its operations in the United States, but with the goal of spreading its operations to the global market. As such, the management should understand the global market, specifically focusing on the identification of the gap, principal countries that should be targeted first, and assessment of main companies that offer similar products or those that will be partners of this company. The world market trend should also focus on the analysis of growth trends in different markets, market participation, innovations and technologies, and new tendencies around the world. The analysis is critical because it will enable the management of this company to develop a clear plan for spreading its operations to the global market. It will understand possible threats that it may encounter and how to overcome them.

Description of the World Market and Identification of the Market Gap

When describing the world market, it is important to start by defining what Dudebox will be offering to its customers. As described in the first section of this paper, Dudebox offers a variety of products to men, from personal hygiene products to tobacco samples, car gear, and grill goodies. It is important to note that these products are already available in the global market. Numerous companies offer a wide variety of shaving products, skincare products, hair products, cologne, among other personal hygiene products. Tobacco is another product that is already available in the global market under a wide variety of brands. An individual can purchase car gear or other outdoor products from supermarkets or car dealers. The problem is not the availability but the approach that is taken to make these products available to the targeted segment of the market.

Dudebox is an idea that is based on extensive market research. It has been revealed that men often prefer taking the shortest time possible purchasing items that they need (Bartels & Jackson, 2021). However, they face a major challenge in the process of shopping for these products. When looking for personal hygiene products, they have to visit several shelves in the supermarkets, and sometimes they may fail to get everything that they need (Bellou & Andronikidis, 2008). They have to walk to another shop to get the outdoor goodies before visiting a car dealer shop to purchase car gear. The process is frustrating for them, especially because of the time they have to spend searching for these products.

The market research also revealed that a significant number of men do not find it easy negotiating for a product. They prefer having a retailer that will offer them the best deal immediately, without having to spend time arguing about the price. When they find one shop charging a significantly high price compared with the last one, they would prefer going to their initial seller. Others would be forced to purchase the product at such a high price because they lack time to shop around. These challenges often make the process of purchasing items that men need to use daily frustrating to the majority.

The Dudebox seeks to address these challenges as long as one makes prompt payment of their subscription fee. They no longer have to waste time shopping around for personal care products. They only need to specify the brand that they prefer to use and the product will be delivered to their preferred location at the right time. The same applies to tobacco samples, outdoor products, and grill goodies. The Dudebox goes a step ahead to make the shopping experience of men even more enjoyable. This company will also help them shop for other products, which are not in any of the three packages explained in the section above. These customers only need to state what they need to purchase and this firm will compare prices offered by different retailers and the quality that they have. The company will then inform the customer of the firm that offers the best quality at the best price. The client will then be linked with the retailer. They can visit these stores or have these products delivered to them after making an online payment. The Dudebox, therefore, is a platform that eases the purchasing process for men.

In the global market, numerous firms offer a wide variety of products either through the traditional brick-and-mortar model or the modern online platforms. However, the market research showed that none of them is specifically focused on attending to the needs of men exclusively. Gillett, one of the leading manufacturers of personal care products, uses retailers to ensure that their products reach their clients, the majority of whom are men. However, the Dudebox will be a specialty shop for men. It will be a one-stop-shop for men who want to shop for personal care products and other items that they regularly consume. Whenever they need a product that this firm does not offer, including involving products such as cars and heavy machinery, they will be adequately advised about where they can purchase the product.

Principal Countries

When developing a new product, it is important to understand the purchasing power of the targeted customers. As was explained, the primary goal of this firm is to spread operations to the global market. Globalization will be taking two main fronts. The first front will be based on the geographic proximity of the foreign countries from the United States, which is its home country. As such, a decision was made to first expand to the North American market. It means that the first country that will be targeted outside the United States is Canada. Canada was chosen because it is the immediate neighbor to the United States and it is also a developed nation. The country also shares many cultural practices with the United States (Fahed-Sreih, 2018). It means that the company will not experience a major culture shock when it starts its operations there. The second country that will be targeted will be Mexico. The country was chosen because it neighbors the United States and has a significant population. Although it is classified as a second word, the purchasing power of the majority of its citizens is satisfactory.

When the first criteria of globalization are successful, the second criteria of moving beyond the North American market will be applied. It will involve targeting developed or first world countries first, then moving to the second world countries, before reaching out to the third world countries. Figure 1 below shows how global nations fall into these three classes. Based on the classification provided, it means that after exploring the North American market, the company will move to the European market and Australia. Some of the specific countries that will be of interest to the firm include the United Kingdom, Germany, Italy, France, Denmark, the Netherlands, Portugal, Poland, and Sweden. These countries were chosen because they are developed economies. Some of them may have a relatively small population, but the purchasing power of individuals is high. They also share a lot with the United States based on Geert Hofstede’s cultural dimensions (Hendri, 2019). The firm may not face numerous challenges when operating in these countries if it achieves success in the North American market.

Classification of Global Nations Based on Their Economic Development
Figure 1. Classification of Global Nations Based on Their Economic Development

The second class of countries that will be targeted fall in the category of second world. They are mainly in Asia and parts of Africa. China will be the first target in this class. According to Dyer (2019), China has one of the fastest growing economy among the top global economies. With a population of over 1.4 billion people, it is the largest country in the world in terms of population (Gamble, Thompson, & Peteraf, 2019). The purchasing power of Chinese is also growing very fast. The country has had a relatively supportive environment for foreign firms. Government policies are designed to support both local and foreign investors as a way of expanding the economy and reducing unemployment in the country. Many American firms such as Apple Inc., Abercrombie & Fitch, and AT&T have achieved massive success in China. It is expected that the Dudebox will be able to replicate the same success. India will be the next target for the firm. With a population of over 1.3 billion people, it is the second-most populous nation in the world after China (Lynch, 2018). It also has a rapidly expanding economy, which means that the purchasing power of individual citizens is also growing. Russia, South Africa, Thailand, Indonesia, and South Korea are also attractive countries in this class.

Many South American countries fall into the class of second world countries, although others are classified as third world nations. In this region, Brazil will be the first target because of its population and the size of its economy. Other nations in this region that will be targeted include Columbia, Argentina, Chile, Uruguay, and Paraguay. The last category will be the third world countries of Africa, parts of Asia, and South America. Expanding to these market will not be a priority until this company has fully colonized the first two categories. It will only move to these countries to demonstrate its dominance and to secure its market share globally. The main challenge in these countries is the low purchasing power. A significant population of the targeted customers in these third world countries may not find it reasonable to pay the proposed subscription fees (Louw, Venter, & Venter, 2019). Some of the countries that will be targeted in this category include Egypt, Kenya, Nigeria, Morocco, Ghana, and Angola. These countries were selected because of their population and purchasing power of their citizens.

Main Companies around the World

The Dudebox seeks to take a unique marketing strategy to achieve success. Instead of manufacturing products that it will be selling to men, the company will be acting as a retailer. At the same time, it will avoid being a traditional competitor to major retailers around the market in which it will be operating. Instead, it will ensure that it partners with these retailers to ensure that customers can easily access a wide range of products, including those that are not directly offered by Dudebox. This strategy is meant to lower industry rivalry as much as possible, especially when operating in markets where some retailers have gained dominance (Lazenby, 2018). The company has identified specific companies around the world, which will be its major partners once it starts its operations.

The Procter & Gamble Company will be one of the primary companies that the Dudebox will partner with to ensure that men have access to products that they need. This company was chosen because it specializes in a wide variety of personal hygiene products. One of the popular sub-brands of the Procter & Gamble Company is Gillette. It offers safety razors and personal care products (Phillips & Moutinho, 2017). Introduced on September 28, 1901, Gillette has specialized in offering personal hygiene products for men (Szaky, 2019). It has gained massive popularity in North America, Europe, Asia, and African markets. From 1989-2019, its tagline was ‘the best a man can get, which has since been changed to ‘the best men can be’. The positioning of these products indicates that the company primarily targets men with these shaving and other skincare products. They are designed to meet the expectations of men in the best way possible. The choice of this company was based on the premise that it is a globally recognized brand with products that have achieved global acceptance. It would be easy to convince customers to subscribe to any of the packages available under the Dudebox if they are convinced of getting quality products from The Procter & Gamble Company.

Besides Gillette, another product under P&G that men will find important is Head & Shoulders. It is an anti-dandruff and non-dandruff shampoo that can be used by both men and women, but it is positioned as a product meant for men (Buttkus & Eberenz, 2019). The product is popular in North America and Europe, although it is already available in the global market. Pantene is another hair care product manufactured by this company. Olay, which was previously known as Oil of Olay, has also proven to be popular among men. Oral-B will be another product that the Dudebox will make available for its customers. P&G will be a major business partner for the Dudebox under the personal hygiene segment. It means that its products will be found in all the three banquets offered by the firm.

It is imperative to ensure that customers are offered the opportunity to choose from a variety of brands. Although Procter & and Gamble is a popular brand, it will not be prudent to assume that all customers would want to use its products. As such, the management of the Dudebox will have to introduce other brands to allow customers to choose whenever they want to make a purchase. Under the personal care and skincare segments, Johnson & Johnson, Unilever, and Henkel will be the main companies whose products will be sold by this new company.

These three firms were selected because of the popularity of their brand, their successful global operations, and the geography location of their headquarters. Johnson & Johnson is an American conglomerate that was founded in 1886 (Chernev, 2019). The firm offers a wide range of products from consumer-packaged goods to pharmaceuticals and medical devices. Under the segment of skincare, products such as Neutrogena and Clean & Clear will be appealing to men. Under the segment of car gear, men will need first air products from Johnson & Johnson, such as Band-Aid products. Some men also have to purchase skincare and personal hygiene products for their children, which means that they will need Johnson’s Baby products.

Unilever is one of the most successful consumer goods firms in the global market. Headquartered in London, this British company has spread its operations to every continent around the world. The company has three main divisions under which it offers a wide range of products. They include home care products, beauty, and personal care products, and foods and refreshments. Skincare and personal care products of this company will be offered to customers directly under the three banquets explained above. Homecare products will be available for Dudebox’s customers upon request. The same will apply to the food and refreshments that the company offers. As a European company, this brand will make it easy for Dudebox to penetrate the European market because of its popularity in the region.

Henkel AG & Co. KGaA, simply known as Henkel, is another major company whose products will be made available to customers who subscribe to any of the packages that Dudebox offers. This German multinational corporation has its headquarters in Dusseldorf but has its operations spread in the global market (Hoyer et al., 2021). It has its products offered in three business units, which include beauty care, laundry, and home care, and adhesive technologies. All its beauty care products will be made available under the three packages offered by the Dudebox. Adhesive technology products will be available for subscribers of elite packages, under the car gear products. Laundry and home care products will be available for all customers upon demand.

Growth Trends in Different Markets

When making an entry into a given market, one of the factors that the management should make is a forecast of growth trends. Blakeley (2020) explains that growth trends in different markets are often defined by a variety of factors. One of the major factors that define the growth potential is the increase in the size of the targeted market. The Dudebox will be targeting the middle working-class men in the selected countries. The rich have employees who can do their shopping, hence they may not need to subscribe to the services of this company. On the other hand, the poor may lack the financial capacity to use the services of this firm.

The middle working-class men form the most appropriate market segment because they have the financial capacity but lack time to shop for products that they need. The Dudebox offers them a solution to the problem of time. The growth of the size of the middle class will directly increase the market for these products (Simon & Fassnacht, 2019). Figure 2 below shows the consistent growth of middle-class households around the world. It is evident from the graph that from 2008 to 2018, the size of the middle class has almost doubled. It is an indication that the size of the market will consistently grow, which will positively affect the growth prospects of the Dudebox.

Global Growth of Middle-Class Households
Figure 2. Global Growth of Middle-Class Households

Purchasing power is another major factor that defines growth prospects in a given market. As Armstrong (2020) explains, it is not enough to have an increase in the population of people in a given market. Individual targeted customers must have the capacity to purchase what a firm presents in the market. One of the ways of determining the attractiveness of a given country is to determine the gross domestic product of a specific country. As was explained above, China is one of the major countries that this firm will target because of its massive population and the growing purchasing power of its citizens. As shown in figure 3 below, the GDP of China was significantly affected in 2020 following the outbreak of COVID-19. In the first quarter of 2020, the economy registered negative growth. However, it has since recovered, and by the first quarter of 2021, it registered one of its highest growth rates in decades. It means that currently, the country’s GDP is healthy enough to support the growth of both local and foreign firms.

China’s GDP Growth Rate
Figure 3. China’s GDP Growth Rate

India was another country of interest as the management of the Dudebox seeks to expand operations of the firm to the massive Asian market. As the second-largest country in the world in terms of population, India presents a massive growth opportunity for this company. The GDP of the country has been growing at an attractive rate of at least 5.2% since the 2009/2020 financial year. The financial year 2008/2008 was relatively slower, at 3.10% because of the global economic recession. In 2019/2019, the growth rate was slowed because of the COVID-19 pandemic. However, the statistics in figure 4 below shows that the country’s GDP growth rate has recovered. These trends show that growth prospects are high in these global markets.

India’s GDP Growth Rate
Figure 4. India’s GDP Growth Rate

Market Participation

Market participation is essential when the company will focus on selling agricultural products from small-scale subsistence and semi-subsistence farmers. Blakeley (2020) explains that these small-scale farmers lack the financial capacity and experience to negotiate good business deals for themselves. As such, they are always vulnerable to exploitation by wholesalers keen on maximizing their profits. The challenge of exploiting these small-scale farmers is that the practice is not sustainable. Such farmers will not make profits from their trade, and the outcome is that they will easily be forced out of the market. Once they are eliminated, it may not be easy to find their replacements. The management of the Dudebox will be keen on ensuring that these farmers are effectively remunerated whenever their product is purchased. The goal is to develop a sustainable and mutually beneficial business relationship with them to ensure that they remain operational for as long as possible. When linking customers with these farmers, the marketing unit of the Dudebox will negotiate for prices that are fair to both the farmer and the consumer.

New Technologies and Innovations

New technologies and innovations are redefining the approach that companies are taking in the market as they seek to expand their market share. Dudebox will be operating in a market that is already dominated by large multinational companies. In the United States and North American markets, Walmart has dominated the brick-and-mortar retail market. In Europe, dominant retailers include Schwarz Group, Lidl and Kaufland, Aldi, and Carrefour are some of the dominant players in the brick-and-mortar retail market. In the online market, Amazon.com remains the dominant player and it has gained massive acceptance in North America, Europe, and parts of Asia (Dawson & McCalman, 2020). These large retailers are embracing emerging technologies to ensure that they remain as innovative as possible when offering their products to global customers.

Online travel service providers such as Uber are also getting creative in offering their services. For instance, Uber Eats is a new innovative product that the company introduced recently (Ha, Kose, & Ohnsorge, 2019). It allows Uber customers to order food, which is then delivered to them. Uber and similar companies may likely use emerging technologies to introduce more products, which may compete directly with what this company offers. Currently, the only uniqueness of the Dudebox is that, unlike these other companies, the Dudebox specifically focuses on products that meet the needs of men. These other major retailers, especially those that are operating in the online platform, define their primary target market in terms of age and purchasing capacity. The management of the Dudebox should take advantage of new technologies and innovation to introduce new and competitive products. It must make its product portfolio as unique as possible to attract and retain a large pool of customers.

New Tendencies around the World

Emerging trends and practices around the world can also redefine the approach that a firm takes to deliver its products. For a long time, shopping was a popular practice among families in both developed and developing families. During weekends or national holidays, families would visit large shopping malls to purchase various items they need and to have fun (Dawson & McCalman, 2020). However, a new tendency emerged when online retailing started to gain popularity. The middle class that previously enjoyed having some time with the family while shopping for various items realized that they could spare some time when they shop online. It meant that they could afford to spend more time at work because someone else will be responsible for their shopping. When the COVID-19 pandemic struck, it demonstrated that online sales are the future of retailing.

Most online retailers such as Amazon.com and eBay achieved massive growth during the period. Traditional retailers such as Walmart are also penetrating the online market because they understand its huge potential. The financial sector has understood the changing market trends and forced and responded appropriately. They have introduced safe and easy ways of conducting an online transaction, especially online payments and the transfer of money. The management of Dudebox should be able to respond to new trends and practices in the market. Blakeley (2020) advises that it is more appropriate for a firm to be responsible for the introduction of new practices in the market instead of having to copy what others are doing. Embracing new technologies and innovation will help this company to define new tendencies in the market.

Local Market

The primary focus of the management of the Dudebox is to achieve success in the local market as soon as it starts its operations. Its ability to successfully move to the regional and global markets will be defined by its performance in the United States market. The firm can rely on the savings of the owner and loans to start and expand its operations locally. However, when it comes to expanding to the foreign markets, it must have demonstrated the capacity to sustain its operations beyond a small market. The United States remains one of the most attractive markets for companies around the world, irrespective of the industry in which they operate. The significantly high population in the country, the high purchasing power, and the manner in which people prefer to spend their income as opposed to saving most of it, means that any serious company that understands market needs and expectations can achieve success. However, Blakeley (2020) warns that not every firm started in the United States is destined to achieve success.

The number of companies that close their operations after only three years in the market is more than those that sustain their operations for a longer period. It means that chances of Dudebox failing after three years is significantly high. The management of this company will need to understand market dynamics in the country and develop unique strategies that will ensure its operations are sustainable. It must ensure that it develops a pool of loyal customers who will regularly pay their subscription fees at the right time to protect its cash flow. In this section, the focus is to have a detailed analysis of the local American market in relation to the products that this company will offer.

How the Local Market Is Different or Similar To Main World Markets

The analysis conducted above has identified specific world markets that the Dudebox will target in its global operations. The United Kingdom, Germany, France, and Italy are the main European markets that this firm will target. India, China, Australia, and Thailand are the main markets in Asia-Pacific. In Africa, South Africa, Egypt, Nigeria, and Kenya were identified as attractive markets for this company. It is important to note that there are similarities and differences between the environments in these foreign markets and that in the United States. The management of this new firm must understand the similarities and differences. It will enable it to identify the markets it should target first because of the similarities they have with the home market before moving to those that are significantly different from that of its home country. When assessing the similarities and differences of these markets, framework for country risk analysis can be of help (Brands & Gavin, 2020). The framework is shown in figure 5 below.

Framework for Country Risk Analysis
Figure 5. Framework for Country Risk Analysis

Similarities to the Main World Markets

The market in the United States is significantly similar to that of the United Kingdom, Germany, France, and Italy. Using the model above to explain the similarities, one can assess risks that firms in these countries face. In the United States and the selected European countries, political risks are significantly low. Cases of kidnapping, gangsterism, and political harassments are significantly low in all of these market. The political class often avoid any direct interference of private business entities as long as they are following laws and regulations set by the government. Operational exposures such as market disruptions, labor unrest, and supply shortage are also less likely to occur in these market.

The civil unrest that took place following the death of George Floyd was an isolated case that was experienced both in the United States and some European countries. However, the political class is committed to addressing such concerns. Although cases of assets destruction during the riots were witnessed during the riot, such cases are significantly rare in both markets (Dawson & McCalman, 2020). Arbitrary transfer of a private property of a business entity to the government or a political leader is also extremely rare in these countries as long as a firm is operating within the confines of the law.

Economic risks in Western Europe and the United States are similar. Economic growth prospects in the United States and Western Europe is similar. In both markets, purchasing power of the targeted customers is high and unemployment rates are low (Dyer, 2019). The size of the middle class, which the Dudebox will be targeting, is significantly big. Inflation in this countries is less common, which means that they all offer economic stability that the firm will need to achieve growth. Cost of inputs in these markets is also the same. Given that they are all developed nations, the cost of operation is comparatively high, especially because of the high cost of labor. These countries have been registering stable economy growths for decades, factors that present growth opportunities for the firm.

Competitive risks in the selected countries are similar to those in the United States. Corruption in Western Europe and the United States is a less common problem. A firm is assured of operating peacefully without having to pay bribes. Presence of cartels that may interfere with operations of a firm is also less common. Strict legal environments in these countries makes it difficult for cartels to operate freely. However, Hoyer et al. (2021) observe that successful firms have to learn how to create networks in the market to get the best deals when sourcing for important materials and seeking to expand in the market. The regulations set by these government are meant to support their operations while at the same time protect consumers, the environment, the government, and the public. Nationalistic preferences, oppressive taxes, and constraints on the local capital are less common problems in these markets.

Operational risks may have direct and paralyzing impact on the new company. However, the management of the Dudebox will not have any serious operational challenges in these markets. In both country, there is cheap power that can sustain its operations. The United States and Western Europe have some of the most advanced telecommunication technologies (Lazenby, 2018). It means that communication with customers, employees, suppliers, shareholders, and other stakeholders will not be a major challenge for the firm. The transport sector in these countries is also advanced. Whenever necessary, the company will be able to use air, land, and water transport to facilitate the movement of its products and employees from one location to the next.

Differences from the Main World Markets

The United States market is significantly different from that in China, India, Egypt, Nigeria, and Kenya. In terms of political risks, the Dudebox should be ready to deal with numerous challenges in these foreign markets than is the case in the United States. In Nigeria and Kenya, corruption is so common that firms are forced to set aside some funds to pay government officials as bribes (Li et al., 2021). Such instances are extremely rare in the United States. Kidnapping and gangsterism is also common in these second and third world countries. In India, political harassments are common during electioneering period as politicians try to endear themselves to politicians at the expense of the private sector. Asset destruction and spoliation are common risks in Nigeria and Kenya because of the activities of Boko Haram and Al Shabbab extremists in the two countries. Asset transfer to the government is a real risk in China, especially when a firm is considered unfriendly to the communist government (Phillips & Moutinho, 2017). These are risks that the Dudebox does not have to worry about in the United States.

Competitive risks in these foreign markets also differ when compared with those in the United States. For instance, it is common for government-friendly firms in China, Nigeria, Kenya, and Egypt to get tenders from the government, giving them unfair advantage over their rivals. Labor unrest in the third world countries is a common problem, especially in the form of industrial actions. Racketeering is a common practice in some of these foreign markets, especially in Nigeria where the problem of unemployment has led to the increase of fraud and other fraudulent business dealings (Louw et al., 2019). Supply shortage may be a common problem in India because of the congestion of the transport system.

Economic risks in these selected overseas markets is also different from that in the United States. In Nigeria, inflation is a potential threat that can have devastating impact on the cost of production, unlike the economic stability in the United States. The inflation also means that exchange rates keep fluctuating in these markets. The effect is that the company will be forced to fluctuate its prices to reflect the economic situation in the country. In some of the markets, especially those in Africa, there is overreliance on imports from North America, Europe, and parts of Asia. The unindustrialized nature of these markets have a direct negative impact on the cost of products in the local markets.

Operational risks that the Dudebox will face in the United States will be significantly different from those in the foreign markets. The United States has some of the most advanced transport infrastructure, unlike some of the third world countries such as Nigeria and Kenya. The cost of power is relatively cheap in the United States than it is in South Africa and Egypt. Telecommunication in the home country is more advanced than that in Kenya or Nigeria (Lynch, 2018). It is also easier to find reliable suppliers in the United States than it is in the selected third world countries. These African countries have to rely on multinational corporations to have access to these materials. However, the United States is home to some of these top manufacturers.

Problems That Can Be Solved With the Product

The Dudebox will offer products that will solve practical problems than men face whenever they want to purchase an item. One of the major problems that this product will solve is having all personal hygiene products for men in one basket. Instead of purchasing several single items, one can easily get all these products when they subscribe to any of the packages that the firm offers. It will be a major relief to them because they will not struggle to have access to these products. The product will save time for the targeted clients. Instead of shopping around for these personal hygiene products, the Dudebox will deliver it to these customers on a regular basis. For those who subscribe to the Elite package, they will also have car gear delivered to them regularly at the place of their convenience.

One of the advanced product that this firm will offer is the right information on products that are not available in its portfolio. For instance, when a customer needs to purchase a television set, they only need to provide their preferences to the marketing unit at the Dudebox. This firm will then conduct a market research, identify a list of the best brands from which the customer can choose based on the prices set. The customer will then be linked directly to the retailer. The process not only saves time for these customers but also offers them the best value for their money. They can spend their time on other economic activities or with family and friends.

It is expected that the Dudebox will create self-awareness among men. According to the research that was conducted, men tend to ignore themselves in terms of personal grooming (Voorveld et al., 2018). It explains why personal grooming products most often target women. The Dudebox will offer a wide variety of these personal growing products from different brands. It will be a reminder to men that they also deserve to get the best personal hygiene products. It will also make them more responsible when it comes to purchasing other household items in their families. Time has always been the issue in terms of the challenge that men face in shopping for their families. The Dudebox will make the process of shopping easier than it has ever been for men. For single fathers, this will be the most appropriate service provider whenever they want to purchase various products for themselves or their children.

Viability of the Group of Consumers in Terms of Size and Purchasing Power

When planning to start a business, one of the main factors to consider is the viability of the targeted market segment. Lynch (2018) explains that the market segment should be large enough to sustain the operations of the firm. It should also have the right purchasing power. Men form the most attractive market segment in almost every country around the world. In the United States, Europe, Asia, and Africa, men tend to earn more than their female counterparts in the same job groups (Louw et al., 2019). They are more economically empowered than any other market segment in these selected countries. Men also tend to spend more than women. In terms of population, men form about one-half of the global population when age is disregarded. Young boys who are still in school will form a major clientele base for the firm once they get into the job market.

The attractiveness of this segment of the market makes it highly viable for Dudebox as it seeks to achieve rapid expansion in the market. The biggest responsibility will be for the management of this firm to identify appropriate products that meet their expectations in the best way possible while at the same time position the brand in a way that men will find attractive. If the brand and products achieves success in this market, this firm has a potential of achieving rapid growth in the United States and the global market. However, Shibata (2021) warns that convincing men to purchase a given product is often more challenging than dong to to women. The management of Dudebox will need unique marketing strategies to achieve this goal.

PESTEL

The ability of the Dudebox to achieve success will depend on, among other factors, the external environment of the home market. The firm seeks to expand its operations to the global market, but before it can do that, it will have to achieve success in the local market. The financial success in the United States will define if it will have the capacity to move to the regional and finally global markets. Simon and Fassnacht (2019) believe that although strategies that a firm employs are critical in determining its performance, the external environment in which it operates also has a major impact. Unfortunately, a firm has no capacity to control these external forces. The management only needs to understand them and then develop a plan of managing them in the most effective way possible. PESTEL model has widely been used when assessing these external forces.

The political environment in the United States has been relatively stable for the last several decades. According to Voorveld et al. (2018), the United States has experienced a few cases of civil disobedience. The recent election in 2020 resulted in insurrection at the country’s capitol. A few businesses were directly affected by the rioters and many people were forced to close their shop. Civil societies have also organized riots to protest against police brutality against a section of the society. For instance, when George Floyd was murdered, several cities around the country witnessed cases of mass riots. Businesses were burned and others were looted by these rioters (Shibata, 2021). Many shops had to remain closed for several days as law enforcement agencies were overwhelmed by these rioters.

It is important to note that although systematic police brutality remains a common problem in the United States, violent riots have been less common in the country. The management of the Dudebox should not be overly concerned about a possible attack by individual rioters. Chicago, the proposed headquarters of the Dudebox, was one of the cities in the United States that were affected by these riots. It may not be a red flag as the firm plans to start its operations. However, the management should remain sensitive to such possible problems. Although it may not individually end racism in the United States, the management of this firm should ensure that it does not tolerate any form of racism or extremism amongst its employees.

The economic environment is another factor that has a direct impact on a firm’s ability to achieve success in a given market. Economic growth and stability is essential as it defines the purchasing power of individual customers within the country (Lynch, 2018). The United States has the largest economy in the world. It also has one of the least unemployment rates in the world among its citizens. The government has been struggling to address the problem of illegal immigration because it directly affects employment opportunities among the locals (Hendri, 2019). The United States is one of the worst affected nations by the problem of COVID-19 pandemic. The government was forced into lockdown for several months as it struggled to contain the spread of the virus.

Several companies were forced out of operations because of the limited movement and interactions of persons across the country. The year 2020 saw the country record one of the worst cases of unemployment in decades. There was a record number of people applying for food relief because they had lost their jobs. Their purchasing power had dropped so much that they had to rely on the government for direct assistance. As shown in figure 6 below, when the pandemic struck the United States, the country’s GDP experienced a negative growth. However, the country is making a healthy recovery and it is expected that by the end of the third quarter (Q3) of this financial year, it will make a full recovery. The management of the Dudebox should start operations as soon as possible at a time when potential competitors a-re still financially weak following the effects of the pandemic. By the time they will be making full recovery, this company should have gained its footing in the local market.

US GDP Growth after COVID-19 Pandemic
Figure 6. US GDP Growth after COVID-19 Pandemic

The social environment is also essential for the growth of a firm in the market. Shibata (2021) explains that the social environment defines cultural practices and beliefs in the country and the purchasing patterns of those targeted in the market. Hofstede’s model of national culture, shown in table 2 below, is one of the best tools of assessing the social environment of a country. In terms of power distance, which refers to the extent to which the less powerful members of the society accepts and embraces their position, the United States is classified as low power distance. It means that people would challenge authority irrespective of their position within the firm. The management of the Dudebox must ensure that power is evenly distributed when operating in the United States. The second factor is individualism versus collectivism. In the United States, people tend to be more individualistic. It means that when the management of the Dudebox is negotiating with employees on issues such as salaries, it should take individualistic approach, rewarding every single employee based on the value that they have to the firm.

Masculinity-femininity is another factor that defines the social environment within the country. In the United States, femininity is stronger as women are now actively involved in the corporate world, just as men (Phillips & Moutinho, 2017). Women are currently holding senior managerial positions in some of the largest companies in the country. The management of the Dudebox should ensure that gender equity is observed when hiring and promoting workers. The fact that this company will be exclusively targeting women, it may be appropriate to have a higher number of male employees working in the sales and marketing unit because they have a better understanding of what men need. Uncertainty avoidance is the other factor that has to be taken into consideration. The United States is one of the nations with low uncertainty avoidance. People tend to take risks and are not afraid to experiment. As such, creativity and innovativeness is significantly higher in the United States than other parts of the world (Simon & Fassnacht, 2019). Dudebox can take advantage of such a culture to promote creativity and innovativeness in its operations.

The next factor is the orientation, which can be long-term or short-term in nature. The United States culture supports short-term orientation (Hendri, 2019). People are more focused on making short-term successes as a way of protecting their future instead of being overly concerned about the future. Factors such as low rates of unemployment makes the majority less worried about the future as they know that they can easily get sustainable employment when the current one is lost. For the management of Dudebox, this culture means that it has to break its long-term goals into short-term objectives which have to be realized within a short period. Indulgence versus restraint is the last factor in this model. In the United States, people tend to indulge more than in other nations as they value enjoying life and having fun (Bartels & Jackson, 2021). It will require the management of this new company to have a delicate work-life balance. As the management demands the best from its employees, it must also ensure that it grants them time to have fun in their private lives.

Table 2: Hofstede’s Cultural Dimensions

 Hofstede’s Cultural Dimensions

Technology is the other external environmental factors that a firm has to keenly observe and take advantage of as it seeks to achieve growth. The United States is one of the most technologically advanced nations in the world (Hendri, 2019). Some of the most successful tech companies are located in the Silicon Valley in the country. The government has created a conducive environment for technology to thrive by directly supporting research and innovation. In such an environment, there is always a constant disruption as new products, production strategies, and marketing approach continue to evolve. The management of the Dudebox must understand these technological trends. Chernev (2019) argues that it is advisable for a firm to be one of the innovators, regularly creating revolutionary products or production strategies. In case another firm invents something that has an impact on the entire industry, this company should be one of the early adopters to enable it benefit from the new trend. Remaining sensitive to technological changes is essential, especially when operating in a highly competitive market.

Ecological environment is the other factor that a firm has to take into consideration when defining its operational strategies within a given country. The United States was one of the signatories of Paris climate agreement (Lazenby, 2018). It was one of the countries that championed for tougher laws to protect the environment. It developed strict laws that discourage emission of greenhouse gases into the atmosphere. It has also developed strict laws that discourage irresponsible release of industrial effluent into water bodies. Although the Trump regime relaxed some of these laws, the Biden government has since reintroduced the policies and made sure that the country is committed to the Paris climate agreement (Hoyer et al., 2021). It means that Dudebox will have to ensure that its operations are in line with the guidelines set by the government in terms of emission of gases and other forms of wastes. Embracing renewable energy will be one of the options that the company will have to embrace to ensure that its greenhouse gasses emissions are within the limits set by the government.

The last factor in this model is the legal environment within a given country. A firm cannot successfully operate in a lawless environment. It requires a clear legal environment that will protect it, its customers, suppliers, and all the other stakeholders. The United States has clear laws and regulations that define how a firm should operate in the market (Phillips & Moutinho, 2017). One of the areas that the management of the Dudebox should be keen about is consumer protection laws. The government has strict laws meant to protect consumers from any form of exploitation. It is important to ensure that firms deliver on their promise. As such, the marketing unit of this firm will have to ensure that in its promotional campaigns, the company will be promising on what it can deliver.

It will also be essential for the management to ensure that it respects all its legal obligations to avoid litigations. It must pay its taxes promptly, pay the employees and suppliers, and meet quality standards that have been set by the government. The clearly structured legal environment means that this firm will also be protected from unfair practices of suppliers or competitors in the market. Although this company cannot directly and significantly influence these external forces of the environment, it can streamline its operations effectively to ensure that they are aligned with these factors.

Objective Customer and Value Proposition

When making an entry into both the local and international markets, the management of the Dudebox should have clear objectives that should be realized and value proposition. Phillips and Moutinho (2017) emphasize the need to clearly explain the characteristics of the group of consumers targeted with the new product. The targeted group of customers should be big enough to sustain operations of the firm and potential competitors. When these factors are effectively defined, the marketing unit can easily define an appropriate path that should be taken to achieve the vision and mission of the company.

Market Objectives

Achieving success in the market requires this company to have customer centric strategies. The Dudebox will be targeting men with its products. The products and delivery approach should be designed to meet expectations of the targeted customers. Figure 7 below shows a customer-centric strategy that the company can use to ensure that it sets market objectives capable of ensuring that it achieves rapid growth of its market share. As shown in the model below, one of the first factors that the marketing unit should consider is the creation of an effective feedback system. Blakeley (2020) believes that feedback creates continuous improvement for a firm. When customers identify areas in which the firm needs improvement, the information should be used to effect changes that would improve quality of products. Customers tend to be loyal to firm that takes into consideration their suggestions for improvement. Sometimes the feedback may come from members of the public that feel operations of the firm is having negative impact on the environment of the immediate society. The information should be taken positively and used to define new operational strategies that will be less controversial.

The model identifies customer-focused leadership as another major factor that should define marketing objectives of a firm. Strategies that a firm embraces highly depends on its leadership. Brands and Gavin (2020) explain that more often, leaders are focused on making profits and increasing the value of shareholders as the only way of securing their leadership position. As such, they may be tempted to create marketing policies meant to exploit customers. The problem is that such strategies may have short-term benefits as customers will be dissatisfied and are more likely to look for alternatives. A customer-focused leadership will emphasize the need to meet clients’ expectations in the best way possible. Protecting the interest of customers is one of the best ways of achieving sustainable growth.

Empowering the frontline workers is another key customer-centric strategy that the management of the Dudebox will have to consider. Customers expect to be handled with representatives who are respectful and understand their needs. Empowering sales representatives involves training them to understand needs and expectations of customers. They should understand the fact that customers may not behave in the same way. Others tend to be more demanding than others (Phillips & Moutinho, 2017). They have to know how to handle each client in the best way possible. Empowering the sales team also enables them to respond to questions that customers may have about the products that the company offers.

Having a customer-centric strategy also involves understanding the customer. The Dudebox is targeting men with personal hygiene products and car gear among others. A detailed marketing research is essential to enable the firm understand expectations of these customers. As Blakeley (2020) states, the company must clearly define the problem that the product will solve for the targeted customers. Taste and preferences of the targeted customers may change from time to time depending on the emerging trends and practices. The marketing unit of this company should understand these changes and respond to them appropriately. The information should be communicated to the relevant departments to ensure that the products of the firm remain relevant in the market.

The model identifies the need to design the experience as another critical factor in having a customer-centric strategy. The management of the Dudebox should design an experience that men should have whenever they purchase products that it offers. Customer experience may be based on the products offered, product delivery approach, pricing, or another other relevant steps taken to make customers happy (Bartels & Jackson, 2021). The best way of designing the strategy is to use the delivery approach. The firm can ensure that products are delivered within the shortest period possible after payment is made. Sales team making the delivery should understand the best way of communicating with each customer. The sales team should also assess the products thoroughly to ensure that they meet expectations of customers. In case of any concern that a client may have, the firm should ensure that there is a timely response and that the issue should be conclusively addressed.

The last factor in this model is for the firm to take into consideration metrics that matters. One of the most important metrics is the growth of the market share. Once the firm starts operations, there should be a regular assessment of the growth rate of the market share. Whenever there are stagnations, relevant departments should identify and address the problem. Another major metric is the rate of customers’ complaints. It is expected that some clients will raise concerns about the quality of products offered to them. These issues have to be promptly addressed, and measures taken into consideration to ensure that they do not recur (Simon & Fassnacht, 2019). Statistics should show that such complaints are reducing despite the growth of the market share. Financial metrics should also be monitored effectively. Using effective product delivery strategies and continuous improvement business model, the firm should ensure that its costs of operations are dropping as the best way of increasing its profitability.

Customer Centric Model
Figure 7. Customer Centric Model

The model above makes it easy for the management of the Dudebox to develop effective marketing objectives that will ensure that it achieves sustainable growth. The following are the specific objectives, based on the analysis above, that should define operations at this company:

  • The marketing department at Dudebox should have an effective feedback mechanism through social media platforms that will allow customers and members of the public to communicate their experience with the products and production strategy that the firm uses;
  • The company should empower its frontline workers through regular trainings to ensure that they can effectively serve customers and relate well with members of the public;
  • The company should embrace customer-focused leadership. The primary aim of the top leaders of the firm should be to create a large pool of highly satisfied and loyal customers instead of making quick short-term financial gains;
  • The marketing department of the company should ensure that they have an effective understanding of the customers’ changing tastes and preferences. This objective can be realized by having regular market research;
  • The top management unit of the company should design specific experience for the customers. The experience should be pleasantly memorable for the clients;
  • The marketing and finance department should have specific metrics that will enable the firm to assess both the market and revenue growth.

Characteristics of Consumers

The Dudebox is a new company that is starting its operations in the United States but with the aim of expanding to the global market. It is important for the marketing department of the firm to understand the characteristics of consumers to enable it define marketing strategies. The model below helps in defining the specific traits of customers based on different factors. The first factor is geographic location of the targeted customers. In the United States and parts of Europe, the purchasing power of customers is significantly high and customers tend to spend a significant amount of their income. However, they are highly demanding in terms of quality offered to them and timely delivery of products.

In China and India, the purchasing power of customers can be classified as average but rapidly growing (Bartels & Jackson, 2021). However, they value saving and spend only when it is necessary. In the African market, the purchasing power of customers is relatively low. However, they can compromise on quality of products if the price can be lowered. When developing the product and value proposition, the marketing unit of the firm should take into consideration the unique characteristics of customers in each of these regions.

In terms of age, the Dudebox will target adult male. It would be appropriate to narrow down the age group to a certain bracket, especially the working class men who are sensitive about their physical appearance. However, the marketing unit of this firm must understand the fact that some customers may not be in employment but have the capacity to purchase these products. Some elderly men who are retired may also find it necessary purchasing products that the company offers. As such, having a broad customer base, all adult men, means that there is the opportunity for the firm to achieve the desired growth both locally and in the foreign markets.

The lifestyle of the customers is the other factor that should be used to define customers. The lifestyle of an individual defines their purchasing pattern (Simon & Fassnacht, 2019). Conspicuous consumption individuals tend to be spendthrifts and are often loud about what they purchase (Blakeley, 2020). They are the most desirable segment of the market because they can also act as evangelists. When they are highly satisfied with products of the company, they will share their joy and satisfaction with friends and family. In the modern digital era, their messages spread through social media platforms such as Facebook and WhatsApp can highly influence others to purchase the product. The health-sensitive consumers will be another primary target for the company. These are customers who are keen about products they use on their skin (Brands & Gavin, 2020). The Dudebox promises to deliver safe skincare products from some of the well-known and reputable brands in the world.

The last factor that defines characteristics of customers that this company will target is the occupation. As Blakeley (2020) observes, occupation of an individual defines their grooming and personal hygiene products that they are likely to purchase. This company will primarily target individuals with white-collar jobs, especially in the corporate world. Personal grooming for this individuals is always a priority. They value their physical appearance because it defines how they are viewed and they respect that they get at work. Depending on their financial capacity, they can easily subscribe to the basic, premium, or elite packages of the Dudebox. They are also in the best position to influence other men to purchase these products because they tend to be pacesetters in terms of grooming trends. Although they will be the primary target, the company will not ignore the blue-collar workers.

Customer Characteristics’ Model
Figure 8. Customer Characteristics’ Model

Value Proposition

The Dudebox, as a firm that is just starting its operations, should have a clearly defined value proposition. According to Bartels and Jackson (2021), value proposition refers to a statement that explains why someone should do business with a given company, convincing a potential customer why the product will be of more value to them than similar offerings from competitors. This company should convince customers that it offers superior value and that subscribing to any of the packages will be of great benefit. Figure 9 below provides a guide that the new company can use to guide the process of developing a unique value proposition.

 Unique Value Proposition
Figure 9. Unique Value Proposition

When defining value proposition, the first step that should be taken is to define what the customer needs and cares about. The statement should revolve around what the customer highly cares about and desires in their lives. The second factor is to determine what the company does well. The proposition should emphasize what the form can do better than the rest of the competitors in the market. What the firm does well should be reflected in what the firm seeks to achieve in the market. The last factor is under the above model is to determine what the competition does well. The marketing unit of the Dudebox will need to identify strengths of firms that it considers competitors. It should find a way of convincing customers that it offers a superior product despite the obvious benefits that the rival firm may offer. The following is the most appropriate value proposition for the Dudebox.

  • The best way to achieve career and social success is to define your appearance with the Dudebox

The value proposition above meets the three criteria set in the model above. It starts by focusing on what potential customers want. It promises them career and social success by improving their physical appearance. According to Bartels and Jackson (2021), the society tend to judge people based on their physical appearance. As such, one who is keen on achieving promotion must start by improving their outlook. A good appearance also improves their overall confidence levels, hence their overall performance. These are factors that the working class men highly value. They are also concerned also value their success in the social sphere. The proposition then defines what this company does well in meeting the desires of the customer. It explains that it understands what it takes to improve the physical appearance of the targeted group. The proposition also acknowledges that there is a competition in the market but it offers the best value for the clients.

Company Structure and Processes

The Dudebox is a new company that is just starting its operation. One of the factors that the business owner has to define is the company structure. The firm should have clearly defined departments that will be responsible for various activities meant to ensure that it achieves its vision and mission. Having these departments also ensures that specific individuals are assigned to these roles based on their skills and competence. Gruner and Soutar (2021) explain that defining a firm’s structure and processes makes it easy to identify strengths and weaknesses that may affect how it takes advantage of market opportunities. The management will be in a good position to identify areas that immediate change is needed to achieve sustainable growth.

Company Structure and Departments

The company structure helps in defining the chain of command, from the top managerial unit to junior officers. At the Dudebox, the senior-most manager will be the chief executive officer, as shown in figure 10 below. As the head of the company, the CEO will be responsible for defining the vision and mission of the firm. Working closely with departmental heads, they will define the path that the firm should take to achieve the vision and mission that has been set. The officer will also be the link between the firm and external stakeholders such as the government, other companies, and shareholders among others. She will have the responsibility of protecting the image of the company. The company secretary, who is also the company lawyer, will be the principal adviser to the chief executive officer. Before a major decision is taken by the top managerial office of the firm, the company secretary must assess it and determine its legal implications. The holder of that office will have to ensure that all decisions that are made by the company do not have negative legal consequences.

The company will have four primary departments. The first department is the marketing unit that will be headed by a marketing director. This department will have the primary responsibility of promoting the brand and products of the company. The department will have two primary units responsible for various functions. The first unit will be responsible for promotional campaigns. It will develop promotional messages and work closely with advertising agencies to ensure that the brand and products of the company are known in the targeted market. The second unit will be the public relations. Its primary role will be to ensure that members of the public, not necessarily the targeted customers, are adequately informed about activities of the firm. In case there is a crisis that the firm is facing or a miscommunication, the department has a responsibility to ensure that the issue is effectively addressed by providing timely information to the public.

The second department is the finance unit that will be headed by the finance director. The department will be responsible for planning all the financial activities in the company. The department will be responsible for budgeting for each department depending on their needs and expectations. It will be working closely with all the heads of departments to determine how the company’s resources can be shared effectively to enable it achieve its vision. As Chhabra et al. (2021) observes, the finance department is also responsible for providing financial records to the shareholders, the government, potential investors, and any other entities that may have the legal right to access company’s accounts.

The next department is the logistics and procurement, headed by the procurement manager. This department will have critical responsibilities and it will work closely with the marketing and finance departments. It is important to note that the Dudebox will not be undertaking manufacturing activities. It means that this firm must have an effective mechanism of getting the needed products from the manufacturers, package them properly, and ensure that they are delivered to the market. This department must identify specific manufacturers, based on the popularity of their brand, products, and pricing, and maintain a close business relationship with them. Products must be procured at the right time and in the right quantity and then delivered to the sales and marketing department for packaging and delivery to customers.

The last department is the human resource unit that will be headed by the human resource manager. According to Gruner and Soutar (2021), the ability of a firm to achieve success in the market, especially if it is a new company, depends on the commitment and determination of its employees. When the top management unit enacts policies, it is the responsibility of the junior officers to ensure that they are effectively implemented. The performance of these workers often depends on the level of motivation, their skills, and unique talents. Policies that the human resource department enacts defines how employees are handled within a firm. It defines how creative they can be and their satisfaction with the assignments given to them. The department will have the responsibility of recruiting talented employees, improving their skills through regular training, and ensuring that they are highly motivated by creating policies that protects their interests and protects them from any form of exploitation.

The Dudebox’s Company Structure and Departments
Figure 10. The Dudebox’s Company Structure and Departments (Developed by Author).

Headcount

The management of the Dudebox must remain sensitive about the number of people that will be directly hired to work on different assignments. As Cortes and Herrmann (2021) observe, lean operations has become a standard practice among highly successful companies. The goal is to ensure that redundancies are eliminated as a firm lowers the overall cost of operation. The human resource department must work closely with the other departments to ensure that they have the right number of employees assigned to specific tasks. There should be a proper justification before the company can hire an employee for each of the various units in the firm. The marketing department will have the highest number of employees because of the numerous activities involved in promoting the brand and products, and ensuring that customers receive their orders within the shortest time after making the payment. At the initial stages of the firm’s operation, this department will have about 14 employees, but the number is expected to grow rapidly as the firm expands.

The procurement department will have the second highest number of employees who will be responsible for delivering products that the company will be selling. The initial number of employees at this department will be 9, most of whom will be drivers. The finance department will come third, with about 3 employees responsible for maintaining financial records of the firm and budgeting activities. The human resource unit will only have two employees besides the head of the department. It means that by the time the Dudebox will be starting its operations, it will have 34 employees, including those in the top managerial positions. The headcount will increase consistently as the operations spread to the rest of the United States and later, to the global market.

Legal Status

When a firm is planning to start operations in a given market, one of the factors that have to be taken into consideration is the legal environment. According to Rojon et al. (2021), a company cannot achieve success in a lawless environment. The law is expected to protect the firm, its customers, suppliers, employees, shareholders, and other relevant stakeholders. The government also needs protection from unscrupulous business entities that may want to avoid paying taxes or other responsibilities expected of it. When the management of the Dudebox has put in place the infrastructure and the entire system of operation, the next step will be to ensure that the company is legally registered. It will have to register the name and trademark for its brand. It has to explain the nature of business to the relevant government authorities and open up itself for detailed inspection. The company will only start its operations once it receives the necessary approvals and documentations from the government.

The company will have to ensure that its operations are within the legal confines defined by the government. It must limit its operations to what the government had approved. Its relationship with every stakeholder should be documented appropriately. When hiring workers, the company’s legal officer must ensure that the law is followed and that employees are not exploited. Engagements with suppliers should be appropriately documented, especially when there is a possibility of future disagreements. It will be the responsibility of the company to ensure that government is supplied with correct books of account for the purposes of taxation to avoid litigation. It is possible that sometimes disagreements may emerge during the normal operational process. It is advisable for the firm to address such cases out of the court as a way of protecting its image in the market. As Rabetino et al. (2021) observe, the legal environment in the United States may significantly vary from that in other foreign countries. The company will have to ensure that it observes rules and regulations in all the markets in which it will operate.

Values and Mission

The Dudebox will need a clear mission statement that will define the path that it takes in the market. Mei and Wang (2021) explain that the mission statement of a firm should demonstrate its commitment to its customers as it seeks to increase shareholders’ value in the market. The following is the appropriate mission statement that should guide operations of the firm:

  • To empower men by increasing their confidence and performance through personal grooming and hygiene products.

Values of a firm define the culture that it embraces in its operations. They explain what a firm cherishes and how they define actions that the management and employees take when faced with challenges. They define moral values upon which an organizational culture of a firm is based. Values of a firm should be aligned with its mission statement (Rojon et al., 2021). They should help a firm to achieve its mission and vision in the market. The following are the values that will define operations of the Dudebox both in the local and global markets:

  • Integrity: to ensure that customers get exactly what they are promised;
  • Accountability: to ensure that every single employee of the firm, irrespective of the managerial position, remains accountable to the firm, shareholders, the government, customers, suppliers, and the public;
  • Diversity: to enhance inclusivity not only in product offerings but also in the workforce of the company;
  • Quality: to ensure that customers are offered the best quality products irrespective of the package for which they have paid;
  • Leadership: the firm cherishes creativity, innovation, and the courage to define a better future for customers and the industry;
  • Passion: the company encourages employees to remain highly committed to serving customers and undertaking every responsibility given to them effectively;
  • Collaboration: to work closely with various manufacturers and suppliers to ensure that the best value is delivered to customers.

Product Processes

The process of developing a new products takes several stages. Once the Dudebox becomes operational, it is likely that the company will develop new products to reduce its reliance on other firms. Although the firm may embrace different strategies of transforming ideas into a product that will finally be sold in the market, figure 11 below shows standard steps needed to achieve the intended goals. The firm will need to create innovation center to facilitate screening and development of new ideas. The first step of idea generation is critical. It defines the innovative nature of an organization (Coad & Storey, 2021). The management should empower its employees to ensure that they can come up with unique ideas that can be transformed into products or production process. A new idea can come from the top managers or the junior-most employees. Measures should be put in place to ensure that every new idea is effectively assessed to determine their viability.

The second stage is the screening of the idea. Cortes and Herrmann (2021) observe that this is a very important stage in new product development process. The innovation center at the Dudebox will receive all the new ideas that employees will present to it. An important and rigorous process of screening the idea will then be initiated. The bearer of the idea will be invited to make a presentation, explaining the problem that the idea addresses or an area of improvement. A cost-benefit analysis will then be conducted before determining whether the idea is worth pursuing. When the team at the innovation center confirms that the idea is worth pursuing, they will then move it to the next step of concept development and testing. If it is a new product, the production department will move to the step of creating it based on the design that is provided by the person responsible for the idea. When the product has been created, it will have to be tested for suitability and capacity to address a problem that it promised to (Rabetino et al., 2021). Improvements can be done on the product at this stage.

The next step is marketing strategy and development. When the innovation center at the Dudebox is convinced about the suitability and viability of a product after it has been developed and tested, it will then make the next step of finding a market for it. The assumption at this stage is that customers are not aware of the existence of the product (Roy & Srivastava, 2021). It means that the marketing department of the company will need to put up a spirited campaign to promote the product. The promotional message should inform customers about the existence of the product, the value it offers, and its price. It is one of the most challenging processes because customers must be convinced about the value of the product for them to purchase it.

The fifth stage is the business analysis process. As one team will be promoting the product in the market, the other team will be assessing the viability of the new product and defining the best way of delivering it to customers. The new product should be capable of generating profit for the firm after factoring in all costs of production. When the viability of the product is further confirmed at the business analysis stage, the next step is product development (Soto-Simeone et al., 2021). The management of the Dudebox will take a major step of making mass production of the new product. The unit cost of the new product should be stated to help the firm in the cost-benefit analysis.

Test marketing is the next step when the new product has been developed. The sales and marketing unit of the Dudebox will have to test the new product in the market to determine how well the market receives it. The effective approach in test marketing is to use personal selling. The firm can hire a team of sales experts who will directly engage customers and collect their views about the product. At this stage, Chhabra et al. (2021) advises that it is advisable to conduct a market research about the products. Customers can suggest possible improvements needed to make the product more successful.

The last stage is the commercialization process. This stage is often defined by the level of success achieved during the test-marketing process. When the product achieves success in the initial stages of testing it, then the management will need to move with speed to introduce it to the market. It will depend on the market within which the company will be operating at the time of the introduction of the product. It is advisable to start by introducing the new product in the home market where the company has a better understanding of the market forces. As the product continues to become popular in the home market, the marketing department can then put into consideration initiatives meant to sell it to the global market.

New Product Development Process
Figure 11. New Product Development Process

SWOT Analysis

The management of the Dudebox will need to conduct an internal analysis to understand strengths, weaknesses, opportunities, and threats. The analysis makes it easy to plan how the firm can take advantage of the opportunities in the market (Coad & Storey, 2021). One of the main strengths of this company is its flexibility. As a new firm that is just starting its operation, the company is flexible enough to change its operational strategies or product portfolio depending on the trends and forces in the market. The company also has a team of dedicated managers who understand unique challenges that the firm faces and values innovation. The company has successfully recruited a team of highly skilled and talented employees who will be responsible for implementing policies developed by the management. It is also important to note that before developing this business idea, a detailed market research had been conducted. It means that the firm has a detailed understanding of the market.

The top management unit of this firm will need to take into consideration various weaknesses that may affect its operations in the market. One of the main issues identified is the lack of experience in the market. The Dudebox is a new company that is just starting its operations in the United States with the goal of expanding its operations globally. The lack of experience means that the company is likely to make costly mistakes in its initial stages of operation. It is also necessary to note that the specific segment that the company targets is still in infancy stage. As such, the firm lacks market leaders whose best practices can be embraced. As a new firm, the Dudebox may experience financial challenges that may limit its rate of growth in the market.

The market presents various opportunities that can enable the Dudebox to achieve rapid growth as soon as it starts its operations. One of them is the massive market size and its huge purchasing power. The company will be targeting men, which forms about half of the world’s total population when age factor is ignored. The working class men are the most empowered segment of the market in all the selected countries. It is also important to note that the size of the middle class is growing in the United States and around the world (Roy & Srivastava, 2021). The growth of the market size means that the company can easily expand its market share if it embraces effective strategies. As men spend more time at work, they have increasingly limited time for shopping (Bouwmeester et al., 2021). It means that the Dudebox will be solving the problem of lack of time for the targeted customers.

The market has threats that this company will need to overcome to ensure that it remains successful in its operations. One of the major threats for the company is the possible competition that it will have to face as soon as it starts operations. It is likely that as soon as the Dudebox starts its operations and achieves initial success, other companies will emerge with similar products. The company must remain innovative enough to protect its market share as it continues to expand both in the local and foreign markets. Another major threat may be the inability to develop a working relationship with the targeted brands. In the initial stages, the firm will rely on these manufacturers to access products that it will be selling to its customers. Unsustainable business policies in some of these foreign countries may be an issue that the company may have to deal with when it finally makes the decision to move to the international markets. It will be necessary for this firm to understand the legal environment of each of these foreign markets before finally making the decision to move into them. Table 3 below summarizes the information.

Table 3: SWOT Analysis

Strengths
  • Flexible
  • A team of dedicated departmental heads
  • Committed and skilled employees
  • A detailed understanding of the market
Weaknesses
  • Limited experience in the market
  • A new industry that the firm targets
  • Limited financial capacity
Opportunities
  • Massive market size with high purchasing power
  • Limited time for shopping among middle class working men
  • Growing size of the targeted market both locally and abroad
Threats
  • Possible competition in the market
  • Inability to develop working relationship with targeted brands
  • Unsustainable business policies in foreign markets

Marketing Plan

The success of this company will depend on the marketing strategies that it will embrace. Brands and Gavin (2020) explain that when a firm is just starting operations in the market, it is likely to face numerous challenges in the market. Its promotion campaigns must focus both on creating awareness for the brand and products. In this section, the focus is to discuss the promotional strategies that the Dudebox’s marketing unit should use to ensure that the targeted customers are aware of its existence and convinced about the suitability and superiority of its products.

Marketing Vision

The marketing unit of this company should develop a vision that should guide the company’s marketing strategies. When developing the vision, emphasis should be placed on the specific objectives that should be achieved within a given period. Buttkus and Eberenz (2019) advises that for a new firm, the marketing vision should be simple but effective enough in addressing specific goals. The following is the initial marketing vision for the company, and it can be adjusted in future as market forces change:

  • To be the leading provider of hygiene and personal care products for men

Marketing Strategy

The marketing department will need to devise a marketing strategy that is effective enough to enable the company to achieve the vision stated above. The marketing strategy often depends on what a firm seeks to achieve, the nature of the targeted market segment, and resources available for the firm. The marketing manager must decide whether the firm will use the traditional mass media, the social media, or a mix of the two. For the Dudebox, the marketing expenses should be distributed in the ration of 3:7 for the traditional mass media and social media platforms respectively. It means that the company will spend about 30% on mass media, mainly targeting television and radio advertisements.

These platforms are increasingly becoming less popular among the working class men because they no longer have the time to watch prime news as was previously the case. Social media platforms will take the largest share of the budget, at 75% because of their increasing popularity. According to Roy and Srivastava (2021), many young men spend most of their time on Facebook, WhatsApp, and YouTube even at a time when they are at work. As such, these are the platforms that will be used to promote the firm’s brand and products.

Branding

One of the primary roles that the marketing unit for this firm will have is to create a strong brand for the company. The firm will need a brand image, logo, and other attributes that can help identify it in the market. Figure 1 below shows the proposed brand image that the company should use in the market. The brand image can be adjusted periodically as the product portfolio for the firm and its vision continue to change. A Blakeley (2020) suggests, the brand name and slogan should be as simple and memorable as possible. The slogan should also reflect the need that the targeted customers have.

The Dudebox’s Brand Image
Figure 12. The Dudebox’s Brand Image

Positioning

Brand positioning is a critical factor that has to be defined when developing an effective marketing strategy for a new company. When positioning the brand, the goal should be to ensure that it remains as appealing as possible to the targeted customers. Quality, convenience, and affordability are some of the main factors that a firm should consider when positioning its products. The Dudebox should be positioned as a brand that conveniently delivers quality personal care and hygiene products for men. The main selling point for the brand should be the convenience.

The market research had indicated that men need these products but lack time to shop around for them. Others do not even know where they can access these products (Coad & Storey, 2021). As such, this is the problem that the company will be addressing, and the targeted customers should be informed about the same. Whenever they think of the Dudebox brand, they should be reminded that all the products that they need will be available for them in one box, depending on the package they have paid for or any other additional requests they might have. They should also be reminded that quality will be a priority when creating an assortment of products to be delivered in each of the packages.

Price Policy

Pricing policy of a firm often define the social status of customers that it targets. Pricing a new product in the market is always one of the most challenging task for many startups. When a product has a high product, the perception that it creates in the market is that it is of premium value (Gruner & Soutar, 2021). As such, it will be considered to be superior to its alternatives. The only challenge is that only a few people may afford to purchase such a product. On the other hand, pricing a product cheaply will mean that most of the potential customers will have the capacity to purchase it. However, the problem is that cheap products are often perceived to be of lower value than its alternatives (Henry, 2018). It means that if a customer is looking for a high quality product, they can easily ignore the brand.

The company must adopt a pricing policy that will make its products affordable without giving the impression that it offers low-quality products. The sales and marketing unit of the firm has set the prices at $15, $20, and $25 per month or $117, $150, and $180 per year for the Basic, Premium, and Elite packages, respectively. This strategy is meant to ensure that customers in various social classes are covered. The elite package will be meant for the high-end products while the basic package will target the masses.

Distribution Channels

The distribution channel that a firm uses depends on various factors such as the ease of getting products from manufactures, the ease of delivering them to customers, a company financial capacity among other factors. According to Mei and Wang (2021), the most appropriate distribution channel should be as short as possible to enable a firm to make maximum profits without having to charge high prices. Eliminating the intermediaries helps in lowering the overall cost of sourcing for the products. Figure 13 below shows the proposed distribution channel that the company should use. Products will be sourced directly from the producers because the Dudebox will not be engaged in manufacturing these products at the early stages of operations. It will then repackage the products based on the package that each client has subscribed for as explained above. The firm will then directly deliver them to customers. The short distribution channel is meant to ensure that the overall cost of delivering a unit product to customers is maintained as low as possible. The short channel also helps in reducing the company’s reliance on other firms to access products it needs to facilitate its operations.

 Dudebox’s Distribution Channel
Figure 13. Dudebox’s Distribution Channel

Promotion

The marketing department of the Dudebox will need to have an effective promotional strategy that will help in strengthening its brand and popularizing its products in the market. As shown in the promotional mix elements in figure 14 below, the company can use personal selling, advertisements, sales promotion, direct marketing, or public relations to achieve its promotional goals. Large corporations with financial muscle often use all these strategies to achieve the desired goals (Mei & Wang, 2021). However, the Dudebox will only need to select the most effective strategy at this early stage to promote its brand and image in the market.

Advertising will be one of the main promotional strategies that the company will use to popularize its products and the brand. As discussed above, the firm will use a mix of traditional media (television and radio) and social media (Facebook, WhatsApp, and YouTube) platforms in promoting the brand. The strategy was chosen because it will ensure that the message about the firm’s brand and products reaches a wide audience within the shortest period possible. At the initial stages of operation, personal selling will be another possible strategy that the company will use in reaching out to the targeted audience. It will involve oral presentation to these potential customers, explaining what the firm offers and benefits that it will have for the subscribers. Sales promotion will be used from time to time to help increase the visibility and demand for the company’s products. The strategy will involve the use of coupons, contests, sweepstakes, rebates, self-liquidating premiums, product samples, trade shows, and exhibitions, as Lazenby (2018) recommends. As the firm expands in the market, it will consider including other promotional mix elements to strengthen its brand in the market.

Promotional Mix Element
Figure 14. Promotional Mix Element

Product Design

The sales and marketing unit will need device a product design that will attract the targeted customers. According to Roy and Srivastava (2021), product design refers to “the process of creating, imagining, and iterating products to address specific needs in a market.” To achieve success in product design, a firm should understand the end-user customer. The person for whom a given product is created should feel that their specific needs are addressed in the most effective way possible. When developing a product design, the Dudebox should understand specific challenges that men would need to be addressed through what they offer. The new company faces a unique challenge in product design given the fact that it will not be manufacturing them. It means that it will have to rely on the product design developed by the major manufactures of the products it will be selling.

The new company will need to redefine its approach to product design despite the obvious challenge it faces. Although it is not directly involved in the manufacturing of these products, it can create a unique design for the various packages that it offers. For instance, the basic package will have personal hygiene products for men. This will be the cheapest package that will target customers who are sensitive about the cost of items that they purchase (Phillips & Moutinho, 2017). The company can ensure that this package is unique by selecting a wide range of brands and allowing customers to make a choice about what they need. For the elite package meant for the high-end customers, the firm should select brands associated with the best qualities for every item that is delivered to customers. The delivery methods for these products should also meet expectations of customers.

Market Data Research

The success of a new company in the market depends on various factors. According to Voorveld et al. (2018), about half of startup companies in the United States do not get to celebrate their third anniversary. A fewer number are able to celebrate their fifth and seventh anniversaries. The management of the Dudebox should ensure that the firm is one of the few that get to remain operational for several decades to come. It all depends on its ability to understand the market and be able to respond to its concerns in the most effective way possible. Customers will only remain loyal to a firm when they are assured it can meet their expectations. Successful firms have learned how to monitor emerging trends and respond to them appropriately.

Regular market research is one of the best ways of understanding concerns and expectations of customers. It is wrong for the marketing unit to assume that the information that it received in its initial market research is sufficient for several years to come. Tastes and preferences of customers often change depending on the prevailing forces in the market. Regular data should be gathered about these changes to enable the company to define an appropriate approach of meeting customers’ expectations. The data should inform the firm’s product offering, product positioning, and the delivery method that it will use (Simon & Fassnacht, 2019). There should be a concerted effort to ensure that the firm remains relevant to the customers despite the changes that happen in the market.

Economic and Financial Plan

When starting a business, it is critical to ensure that the financial aspect of the company is as healthy as possible. As Soto-Simeone et al. (2021) observe, the sustainability of any business depends on its financial success. The operations of a firm must ensure that its revenues exceed its operational cost. The income that it generates must sustain its operations. In this section, the focus is to discuss the financial implications of the firm by determining the breakeven point and payback period. The section will also analyze the cost of capital and return on investment before computing the balance sheet, profit and loss account, and the budget.

Breakeven Point and Payback Period

When conducting the analysis, it was necessary to start by determining the breakeven point and the payback period for the company. The breakeven point will help the business owner and potential investors to determine the volume of sales that will have to be made for the firm to have a no net loss or net profit (Roy & Srivastava, 2021). It is the point at which the revenues of the firm will be equal to expenses. On the other hand, payback period helps in determine the period that it will take for the firm to have a net cash inflows, which is aggregate to the initial cash that was invested in the project (Phillips & Moutinho, 2017). It helps the company to determine how long it would take for the owner to generate back his investment. Table 1 below summarizes the projected sales revenue and expenses for the next five years.

Table 4: Projected Sales Revenue and Expenses

Sales Revenue {USD} Expenses {USD}
Year 1 750,000 1,950,000
Year 2 1,160,000 850,000
Year 3 2,978,000 950,000
Year 4 4,550,000 1,250,000
Year 5 7,850,000 2,750,000

The analysis in figure 15 below show that the company will have to make sales worth $ 1,100,000 to achieve the breakeven point. It will be at this point that the firm will neither make a profit or a loss in its operations. The analysis also show that the payback period will be by the beginning of the second year of operations. It will take the business owner about 13 months to get back their cash investment from the business, assuming that all the other market factors remain constant. The period may be shorter if the company experiences rapid success in sales more than what had been expected. On the other hand, the period may be longer if the company runs into unexpected challenges.

Break-Even Pont
Figure 15. Break-Even Pont

Budget

The finance department of the Dudebox must have a clear budget to ensure that every activity is appropriately financed based on its significance to the company. Table 5 below provides a breakdown of how the company will spend a capital of 2 million dollars that it already has. The largest share of the capital will be used to pay salaries and wages of the employees who will be working for the company. The purchase of suppliers will take the second largest share. A significant amount of the money will go towards the payment of rant for the year. To ensure that the brand and products of the company are known in the market, the firm will make a significant investment into promotional campaigns. Other major areas of investment include fixtures and fittings, government fee, and miscellaneous expenses. The table below summarizes these expenses.

Table 5: The Dudebox Budget

Item {Year 1} Cost {USD} Capital
Rent 350,000
Fixture & fittings 25,000
Advertisement 275,000
Salaries 650,000
Supplies 510,000
Government fee 5,000
Miscellaneous 135,000
Total 1,950,000 2,000,000

Cost of Capital

The cost of capital is another factor that has to be considered when evaluating the financials of the company. A firm can finance its business through equity, debt or a mix of the two. The balance sheet shown in table 7 below indicates that half of the firm’s capital was financed through debt. The calculation below shows that the cost of capital is reasonable given the short duration that the firm intends to repay the loan.

Cost of debt = (Total debt/Interest expense) × (1−T)

= (1,000,000/250,000) × (1−0.1)

= 4×0.9

= 3.6

Profits and Losses

When a firm starts its operations, the management must acknowledge the fact that it can either make a profit or a loss. The goal is to make profits, but sometimes unforeseen challenges may emerge that may negatively affect the operations of the firm (Li et al., 2021). Table 6 below provides a calculation of the profit and loss for the company in its first financial year of operation. It is evident that in its first year of operation, the Dudebox will make a loss of 1,200,000. The reason for the loss is the massive initial investment that will be made in this period. The company cannot fully recover the investment within the first year of operation. However, it will make a full recovery within the second year, when it is expected to start making attractive profits.

Table 6: Profit and Loss Account

Profit and Loss Account
The Dudebox LLC
Item Amount {USD}
Total revenue 750,000
(Less) Cost of Goods Sold 510,000
Gross Profit 240,000
Less Expenses
Rent 350,000
Advertisement 275,000
Fixtures & Fittings 25,000
Salaries 650,000
Government fee 5,000
Miscellaneous 135,000
Total Expenses 1,440,000
Net Profit (Loss) -1,200,000

Balance Sheet

The balance sheet is an important document that the finance department must keep updating regularly based on the changes that a firm goes through in its normal operations. It shows a firm’s liabilities, shareholders’ equity, and assets as at a specific period. For the Dudebox, the management will need to have this document for it to understand its financial position. Table 7 below provides the balance sheet for the company as at June 1, 2021. The figures are expected to change after a given period as the firm continues with its operations.

Table 7: Balance Sheet

The Dudebox LLC
Balance Sheet
As at June 1, 2020
Assets Amount in USD
Current Assets
Cash 300,000
Accounts receivables 225,000
Prepaid Rent 175,000
Total Current Assets 750,000
Long-Term Assets
Land 255,000
Building and improvements 645,000
Furniture and fixtures 110,000
General equipment 240,000
Total Fixed Assets 1,250,000
Total Assets 2,000,000
Liabilities
Current Liabilities
Accounts Payable 35,000
Taxes payable 15,000
Salaries and wages payable 38,000
Interest payable 12,000
Total Current Liabilities 100,000
Long-Term Liabilities
Loan 1 250,000
Loan 2 650,000
Total Long-Term Liabilities 900,000
Owner’s equity 1,000,000
Total Liabilities and Owner’s Equity 2,000,000

Return on Investment (ROI)

When making an investment into a given business project, it is the expectation of the owner that there will be attractive returns. The investment made must yield attractive returns for the business to be considered viable. Shibata (2021) argues that it may take some time for a firm to start making attractive returns in the market, especially when making an entry into a new industry. For the Dudebox, it may take some time for the firm to start yielding returns as it understands unique traits of the market. The return on investment, calculated below, shows that there is a huge potential for success for this firm. According to Simon and Fassnacht (2019), when a firm’s return on investment exceeds 2%, it is creating value. On the other hand, if it is less than 2%, the operations of the firm will be losing value on investment. At 47%, as shown in the analysis below, the Dudebox will be creating a significant value on investment within a short period. It reaffirms the huge potential that the market presents for this firm.

ROI = (Current Value of Investment − Cost of Investment) ÷Cost of Investment

= (750,000 – 510,000) ÷510,000

= 240,000 ÷ 510,000

= 0.47 or 47%

Financing the Project

The Dudebox project is based on a detailed market research, which revealed that there is a huge market gap that is yet to be addressed. The analysis conducted above shows that the market has a huge potential not only in the home market of the United States but also in foreign markets of Europe, South America, Asia, and Africa. However, the issue of financing must be taken into serious consideration. According to Mei and Wang (2021), a business can be financed through direct investment made by owner. Alternatively, a firm can also finance its business through debt. A debt can be obtained from financial institutions, friends, or family members at an agreed terms and conditions. In this project, the owner of this business used personal investment and loan to finance the project. The loan has been taken from a financial institution and has to be repaid within a period of 5 years.

Conclusions

Summary

The market research project that was conducted revealed that most of the companies that manufacture personal care products often target women. There is a general perception that women tend to be highly sensitive about their physical outlook but men are not. However, the research revealed that men are getting increasingly concerned about their outlook. In the corporate world, the image of a person is critical as it defines the perception of others towards a given individual. With stiff competition in the corporate world, men are investing in their physical image. They are now purchasing grooming products to ensure that they can remain attractive. Although the market for personal care and hygiene products for men is growing rapidly, men still struggle to purchase these products.

The research revealed that men prefer having all the personal care products they need in one package instead of having to shop around for them. It has also been confirmed that the market segment has a huge potential in terms of its size and purchasing power. In the United States and many other parts of the world, men tend to earn more than women in the same job group. It means that their purchasing power is higher. Although there are numerous companies that produce products meant specifically for men, the research revealed that these firms do not package most of these essential personal and hygiene products in one basket. As such, they have to spend unnecessarily long time to purchase these products.

The Dudebox has understood the challenge that men go through when they need these products. It has also understood the potential of serving this market segment by offering them what they need in a convenient way. Roy and Srivastava (2021) explain that many customers may not mind paying premium prices if they can be served in the most convenient way possible. At a time when many men spend most of their time at work trying to achieve career success, serving them at their doorsteps is highly convenient for them. The products will be offered in three different bouquets, which are the Basic, Premium, and Elite packages. The firm intends to expand to the international markets after the first two years of operation in the United States. It will first move to Canada then Mexico because they are in the same region as the United States. The firm will then move to Europe, South America, Asia, and African markets in that order.

Impact of the Project

It is important to assess what will be achieved after the successful implementation of the project. The Dudebox project will have a major impact on different stakeholders. The targeted customers, the business owner, suppliers, employees, the government, and members of the public will all be directly impacted by the project. The targeted customers will no longer have to struggle to purchase personal care and hygiene products. They will only need to contact the sales department of this company and the products will be safely delivered to them at their preferred location. For those who subscribe for the elite package, they will get additional products such as car gear, making their work easier. These customers will also benefit from the firm by getting information whenever they want to purchase a product that is not available in their packages. This company will guide them to the best retailers for these products.

The company is expected to have direct financial benefits to the owner and investors who may want to purchase its stock in the future when it goes public. The owner of this company has already invested one millions United States dollars into this project. Another one million dollars has been received as loans from financial institutions. When the project achieves success, the owner will benefit from the profits that will be generated. The financial freedom will reduce the need for the investor to seek employment in other companies. The employees will also benefit directly from the success of the company. As the firm expands beyond the national borders, the current employees will have opportunities to achieve career growth. Their hard work will be rewarded through promotion and an increase in their salaries.

The government will benefit from the success of the Dudebox project. There will be a direct financial benefit to the government through taxes and other levies that the new company will have to pay. Besides the corporate tax, the government will also benefit from the pay-as-you-earn from the employees of the company. The company will also help the government to reduce unemployment rate in the country as it increases the workforce. Members of the public will also benefit from the success of the new firm. The company will continue to create new employment opportunities for the locals. It will also engage in corporate social responsibilities to help protect the environment and to improve the social welfare of the locals. Suppliers of this company will benefit from the sale of their products through the company. The marketing unit of this firm has identified specific suppliers that it will work with to ensure that the targeted customers have access to the products they need at the right time. As the project becomes more successful, these suppliers will also achieve financial success.

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